What is Net-Neutrality?
In the last couple years net-neutrality has been in the news, and just last week, FCC Chairman Ajit Pai announced plans to repeal net-neutrality regulations. Many of our clients and friends have asked us "what is net-neutrality?" In this post we explain net-neutrality and why we think it is imperative to preserve net-neutrality regulations.
Net-neutrality is the principle that Internet Service Providers (ISPs, the companies that connect you to the Internet) must treat all data the same way. This means that any condition they impose on their service, such as price, speed, or other limits, cannot be based on the websites, apps, or online services you choose to use.
You may not be aware but the Internet is much more than just websites - all the apps and online services you use are possible thanks to the Internet. This includes: email, instant messaging, maps and directions, video & audio streaming, file transfer, video calls, etc.
You can think of your Internet connection as the road that connects your home to the highway - your ISP would be the owner of that road and you pay them for using it.
With net-neutrality you can use any website, app, and online service you choose, all at the same speed and price. Using the road analogy, what you pay for using it is always the same regardless of your final destination at the end of your trip.
Until now ISPs have offered packages at different prices based on criteria such as speed, data transfer caps, and number of devices. This is equivalent to paying different prices on a toll road based on the number of times you drive the road, and the size of your vehicle.
This level playing field is what enabled innovation and competition on the Internet. Anyone can create a new website, app, or online service, and they can be reached and used by anyone connected to the Internet.
The Internet without net-neutrality
Without net-neutrality ISPs will be allowed to create packages that may discriminate based on the websites, apps, and online services you use. ISPs may apply conditions to specific websites or online services such as blocking access, slowing down the speed, or charging extra fees to you or the website owner.
Below are some examples of the types of new packages that ISPs would be allowed to offer:
Comcast could create a package where Hulu (a company partially owned by Comcast) is the only video streaming service available. If you want to to access Netflix or YouTube (or any other video streaming service) you need a more expensive package.
Verizon could create a package where you need to pay an additional per minute fee for calls or video calls that you make using Facetime or Skype.
Large companies like Google, Facebook or Amazon could pay ISPs so that their own websites and online services are the only ones available (e.g. the only search engine would be Google, the only social network would be Facebook, the only online store would be Amazon)
ISPs could charge a fee or commission for purchases you make with online merchants (similar to Apple charging a fee for purchases done on iPhone apps)
These kinds of Internet packages are not just the construct of imagination – they are starting to appear in parts of the world where there are no net-neutrality regulations, and here in the U.S. since the early 2000s there have been several legal battles around ISPs blocking or slowing down lawful websites or online services. Without net-neutrality, large and entrenched companies could pay ISPs to get preferential treatment, or ISPs could just give preferential treatment to their own websites and online services. Other websites, apps, and online services would be unable to compete in this new environment unless they have significant financial resources.
Why is this a problem now?
ISPs are the gatekeepers of the Internet and there are great incentives for them to start using their position in creative ways to extract more profit.
Most ISPs are integrated with other businesses or owned by large conglomerates that can greatly benefit by having preferential treatment over their competitors. They usually offer phone service (landline, cellular, and VoIP), television and movies (broadcast, cable, and streaming), e-mail, and home security – all businesses that have suffered competitive pressure from Internet startups.
In addition to that, the online economy has grown explosively – it is estimated that the Internet contributed 5.4% of the US economy in 2016 – about $1 trillion, a 46% growth from 2010. Over 80% of Americans use the Internet (close to 100% for ages 18 to 50) for all types of activities, from the trivial to the transcendental. We use the Internet to send jokes, search and apply for jobs, read the news, and manage our finances, while businesses cannot fathom operating or competing without access to the Internet.
ISPs argument against net-neutrality regulations is that these new types of packages will allow them to provide cheaper access to the Internet to consumers. It is true that ISP may be able to offer discounted packages, but users will not have access to the full Internet, only a watered-down, limited, and biased version of the Internet. This is particularly concerning given the already low level of competition among ISPs: one-third of Americans have only one ISP available in their area, and another third have only two ISPs to choose from.
The Internet has become a must-have in our lives, not unlike electricity or water… or roads. In our view, it is not difficult to see the importance of ensuring that anyone connected to the Internet has the freedom to unfettered access to all websites, apps, and online services.
You can help preserve net-neutrality
In 2015, the FCC enacted net-neutrality regulations on ISPs. On November 21, 2017, the FCC announced plans to repeal net-neutrality regulations. A vote is scheduled for December 14, 2017 when the 5-member FCC panel will decide on the matter.
Thanks to net-neutrality you can be assured to have access to new and innovative websites like https://democracy.io where you can easily write to your Member of Congress and both of your Senators, and ask them to oppose the FCC Chairman’s plan to repeal the current net-neutrality regulations. If you need inspiration on what to say you can just use the following:
"I am asking you to contact FCC Chairman and demand he abandon the current plan to repeal net-neutrality regulations."
One-third of US households have no choice for broadband service
Boston Consulting Group: The Internet Economy in the G-20
U.S. internet usage penetration 2016, by age group
Internet usage penetration in the United States from 2015 to 2022